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Japan Has Means to Recover from Quake Says IMF

The International Monetary Fund said on March 18 that Japan has the financial means to recover from a devastating earthquake and ensuing massive tsunami.

As the official toll of the dead and missing after Friday's quake and tsunami flattened Japan's northeast coast topped 15,000, the IMF stressed that Japanese authorities were taking the right steps to deal with the disaster. "The most important impact on Japan is the humanitarian one," said Caroline Atkinson, an IMF spokeswoman. "The most important policy priority is to address the humanitarian needs, the infrastructure needs and reconstruction and addressing the nuclear situation," she said.

"We believe that the Japanese economy is a strong and wealthy society and the government has the full financial resources to address those needs."

Asked whether the world's third-largest economy had asked for IMF help, Atkinson said: "Japan has not requested any financial assistance from the IMF."

The IMF was playing the same role with Japan as with any other country: analyzing, offering advice and promoting dialogue, she said. The spokeswoman declined to comment on what the Group of Seven leading economies -- which includes Japan -- could offer to help.

French Finance Minister Christine Lagarde, who had called the talks, suggested that financial assistance may be extended. "We must be at the disposal of our Japanese friends on the monetary side," she said. The G7 also includes Britain, Canada, Germany, Italy and the United States.

The IMF's Atkinson said the direction the Japanese authorities have taken to address the crisis "is the appropriate policy."

"Restoring the economy as quickly as possible to its full-growth potential is the most important contribution that policy can make," she said.

As for the effect of disaster spending on Japan's debt, the largest in the industrialized world at roughly 200% of gross domestic product, Atkinson said that rekindling growth was also the best way to deal with this. "That's why I'm stressing the importance of rebuilding the economy. That in itself contributes to the longer-term fiscal health of the country."

She declined to comment on the soaring yen, which hit its highest level since World War II against the dollar on March 16. Any IMF comment on foreign exchange is "nested" in a medium-term context, she said.